Changing Indian Market Place - From Category Penetration to Competing for Market Share

We are entering the second phase of marketing in India, for the first time we are witnessing a situation of categories entering into a stage where penetration would reach near 100% or exceed it. Till now we have been working on marketing strategies to increase penetration , getting the first time users to try out offerings versus a situation where the you have to either increase the usage of the product or a service in a well established market. This is where maybe we will see the true meaning of the statement "Customer is the King".

Taking the example of what is happening in the mobile phone market, in most of the metro markets the penetration levels are reaching 80% and in some markets like Chennai the figure has exceeded 100%. So what does it mean for new operators like Aircel, and virgin mobile when it enters a market where the category penetration is so high. There would be two ways of gaining market share , first and more difficult option would be to try and attract users from established players or second way is to encourage users to go for another mobile.

To push consumers to switch their operators would involve a different set of marketing strategies versus the ones which are used to increase the penetration in a particular category. May this is what we can see from the approach that both virgin and aircel are using , by focusing on value added services and non-typical offerings like paying for incoming calls. But this is just the beginning and we will see the manifestation of this change in the coming few years...

Learning Sales From Movies

Was looking for a sales clip to use in my sales management class, found a few clips from movies which I thought would are worth sharing , need to think which of these could be used in the classroom context,

First one is from one of my best movie, In Pursuit of happiness



Second is the clip from a sales meeting , goose bumps...



The last one is a phone sales demo

Is branded fuel worth the price???

Almost a decade back the fear of competition forced the PSU oil companies to become more market savvy, the logos were changed , the retail outlets were refurbished, some of them started their own retail ventures to make best use of the available space and along with that came the concept of branded fuel. Each of them had their own brand of extra mileage fuel and though people were initially sceptical about the actual benefit now many users have slowly started using branded fuel...

Now there are conflicting news on the actual benefit that a user might derive out of using branded fuel. The state-run oil companies have not been able to back up the claims to Monopolies and Restrictive trade practices Comission (MRTPC)that the branded fuel gives higher mileage and better engine performance. Link Though a cursory visit to their websites provides many details of the benefits of branded fuel, HP Power, IOC Speed

A couple of years back I had written about my observation on how branded fuel was being used by auto-riskha drivers, which showed that they were able to get the extra mileage by using branded fuel. And managers at the oil companies are clear on the benefits from these. Maybe there is an urgent need on the part of the companies to react quickly and provide the backing for their claims on branded fuel otherwise it could lead to a back lash from consumers.

Because consumer value is part perception and part reality, and a successful product is a good mix of both, same hold true for branded fuel, once the users starts doubting the authenticity of the claims of the company sales and bound to drop,

Measuring fairness through meters

The fairness cream category has seen a lot of activity not only in for women but also for men's fairness creams. With the entry of many new players into this huge segment, untapped segment ( untapped because it is literally owned by the market leader F&L) one can see some small time innovations coming in...



Garnier White Cream was the first to come up with a meter to measure skin tone, so that one could measure the fairness level before and after use of the cream. Though the idea did not appeal me much when I first saw the ad but now slowly I find it has been adopted by fair and lovely and Vaseline. Copying though raises ethical issues it also indicates that the idea is good enough to be copied.............


The utility of the meter is that it is making fairness more tangible, beacuse typically even if the cream were to work it would happen gradually and the users will not be able to know the impact unless they have something to benchmark against and this is where the fairness meter comes in.

Cusine the Missing Component Tourism Promotion

Discussing diversity in India is like peeling an onion...

Today I was thinking about how our food habits differ across the country. It will not be wrong to say that food taste and habits change with every 100 kms that one travels. And most of us look forward to trying out the regional specality whenever we visit another region.

Be it the ubiquitous "Gujarati Thali" when one is on Gujarat or the fact that a visit to Bhuwaneshwar is not complete without a meal at "Dalma" resturants. The list is endless,

MTR in Bangalore
Sarvanna Bhawan in Chennai
Thunda Kabbab in Lucknow
Paradise Birayani in Hyderabad
......

But what surprises me is that one has to dig for this sort of info through talking to local people , though this information should be an integral part of the tourism websites and tourist itinerary...

A visit to the websites of a few of these city does not show any sign of these details ???

This would actually go a long way in promoting tourism in many of these cities and more than that they would give a more holistic experience to the tourist and make his visit more memorable....

TV Industry Post Akai and Cars after Nano,

Will Nano redefine cars???

I have missed out posting during the launch of Nano , because of my traveling. But then maybe this is the right time to reflect back on the impact Nano would have on the car industry as a whole, more so in the context of the crisis that auto industry is currently undergoing. I had written earlier on how competing car manufacturers moved from denial to reactive stage in the days before the car was unveiled in the Auto Expo. This in a sense a continuation of that thought stream.

I was reflecting back on how Akai TV changed the landscape of TV industry in the late 90s when it came up with it's low-priced color TVs (in combination with a sleeve of exchange schemes). For the benefit of readers who were too young to remember the launch of Akai I will give a brief recap. Before they came, prices of color TVs use to be out of reach of most of the middle class households, at that time it use to priced around Rs 20000/- for a standard 21' TV. And I would say most of the players in the industry were happy with the situation, as it made it a premium product and they had a lot of cushion in terms of margins, but then when Akai came in it forced everyone to rethink the pricing and that comfortable cushion was removed and everyone had to start thinking afresh, from moving away from the vertical integrated model of manufacturing TVs to the procurement based model.

I foresee a similar impact of Nano on the car industry and this time the impact would not be limited to Indian industry, but the whole world itself as Nano would be launched in Europe by 2011. They would be forced to question the basic assumptions on which the industry has been operating till now and reinvent the way they have doing the business till now, and the consumer would get benefited because of all this ...

Economy Slowdown Vs Sucess Stories

Everywhere what one listens to is the stories of the negative impacts of the slowdown, lowered growth projections for the Indian economy, the details of how many companies have put their expansion plans on the back burner and so on....

But then there are some examples of how companies are also managing to fight the slowdown and continue to grow. I thought it would be worthwhile to document these stories too,

First is the story of how Big Bazaar has managed to grow in a market where most of the other players are facing the heat of the slowdown. It is the only retailer which has managed to grow at 25% in India. This continued growth has been attributed to the instincts of Mr Biyani , and his ability to keep himself close to the ground realities. I had an opportunity to listen to him at one of the convocation addresses which he had given, there too his message to the students was that in the real world one has to be very quick to sense, learn and respond to challenges thrown up by a rapidly changing market. He has shown that he practices which he preaches...

The second case is that of Hero Honda , it has recently posted it's best ever performance in its 25-year history. The reasons are a combination of their strategy of sticking to the 100 cc segment while rivals focused on the 100cc plus category and the attention to rural and semi-urban markets, which have not witnessed slowdown as others. For more on the story, link.

And the imminent launch of Nano in the market should also help cheer up the consumers...

Tata Magic - Rural Transport Vehicle

Was travelling for the last week so could not update much. Will share some of my travel insights..

I noticed the presence of Tata Magic across the roads in UP, Delhi and Haryana. The vehicle is being marketed as a rural transport vehicle. With a 700 cc engine and a van like design it seems ideal for the passenger tranportation needs in rural India. The vehicle is designed to take 7 passengers, and one who has seen how many more are squezzed knows that the maximum number of people is best left to the imgination of the driver. It seems that Tata would end up using the chassis of its existing Ace ( a huge success) and thus able to optimise on the costs.

Though Tata Magic is not the first to enter this segment, some year back Hindustan Motors came up with a rural transport vehicle called RTV, but it did not succeed much.Today one can seen some of them plying as school vans. But my feeling is that Tata Motors has again hit the right spot in the market going by the number of Magics I have seen on the highways in the country. Obviously the price of around 2.5 lakhs worked in its favor, but will magic follow the footsteps of Ace?

For more details on Magic visit Tata Magic

Mumbai Dabbawala - A Sucess Story

A year back I had an opportunity to listen to a presentation made by Mr Manish Tripathi of Dabbawala from Mumbai. He shared his ideas with us on the working of the model and he kept the audience totally glued to his presentation inpite of limitations of English. Later on he shared with me that he had made similar presentations in many Ivey League schools overseas also.

For more on Dabawabawala visit thier official website, link

I have made an attempt to document Indian success stories in my blog and felt that this one is on top of the pile. The model is totally designed for India and provided its utility and efficiency over many decades. Now many companies are trying to leverage this network for pushing their sales, be it the telecom companies to sell their re-charge coupons to the clients of dabbawala or the insurance companies trying to reach these people during the March end rush. I found a very good presentation in slideshare so thought would upload that here..

But one of the learning's from the model which at times gets unnoticed by people is that there one can achieve record efficiency levels(beyond six sigma)by using simple basic coding. Most of us when told about this level of efficiency would associate it with a extremely sophisticated modern way of working backed with a lot of IT....

Mumbai's Dabbawalas - Amazing Management Success Story India

View more presentations from Paavan Solanki. (tags: lunch boxes carrier)

Indian Consumer buying Habits 2 - Aversion to Credit

Again this is also more of a cultural issue, we have been told since our childhood days "one should spend only within his/her means", so we have had a general aversion to credit and more focus is one savings, as can be seen from our high savings rate.


Now this has changed with the younger consumers, the generation which has started working after liberalisation is more open to idea of taking credit to buy TV, Fridge, Homes. And marketing has also contributed to this shift in consumer habit, with credit card companies and banks aggressively promoting the 'spend today and pay later" philosophy. But if one were to appreciate the values the older generation still holds against the idea of credit one needs to flash the plastic in front of their parents and ................

Though just when one thought the days of being conservative with the use of plastic were gone, the slowdown in the economy has again brought this issue back into focus. The stories of how many consumers took up large loans to buy flats and cars and are now struggling with their repayments either because of pink slips or salary reduction. This would force many consumers into their shells and become more cautious in availing credit and so though not back to square one but atleast a small step back....